AgTalk | PVR's consolidated top-line grew by 107% y-o-y: Ajay Bijli

India’s leading multiplex chain PVR recently launched its 365th screen in Mumbai. The company has been on a strong growth path and has added 138 screens in FY’2012-13 through the acquisition of Cinemax and another 8 properties with 47 screens through the organic route. It plans to add another 90 screens in FY’2013-14 and according to Ajay Bijli, Chairman and Managing Director (CMD), “by 2015 we plan to open 500 screens across major cities,” he says.

The company currently has presence in major cities, ‘B’ & ‘C’ towns like New Delhi, NCR, Bhopal, Nagpur, Chennai, Lucknow, Indore, Mumbai, Ludhiana, Ahmedabad, Bangalore and others. PVR currently operates India's largest multiplex, PVR Orion, in Bangalore with 14 screens including three ultra-premium cinemas known as the Gold Class.

Recently PVR opened the five screens revamped FAME multiplex in Andheri, Mumbai. The revamped multiplex is an Enhanced Cinema Experience (ECX) property that aims to bring in state-of-the-art entertainment, at par with international standards to movie lovers. Adgully spoke to Ajay Bijli, CMD on the eve of the launch to know more about his plans and the industry. Bijli has over 15 years of experience in the movie distribution and multiplex business, he began his career by revamping and refurbishing 'Priya Cinema', a movie hall owned by his family and later on set up PVR in joint venture with  Village Roadshow of Australia in 1995.

He holds a Bachelors degree in commerce from Hindu College, New Delhi and has also completed the Owners President Management Program at Harvard Business School. As CMD he is responsible for identifying important business initiatives and strategic opportunities for the company.

Following is the excerpt of the interview.

Adgully: Can you give us the idea behind going for a revamp? What was the need?

Ajay Bijli: Sure. I believe that providing the consumers with the best in class and a unique experience is really important. So we thought of going ahead with revamping FAME.  Re-launching one of the oldest and significant multiplex is therefore a planned move keeping in mind the growing needs of discerning audiences for quality cinema. We are thrilled to offer movie aficionados the finest cinematic experience in the city.

AG: You have introduced Enhanced Cinema Experience (ECX) with the launch. Please brief us on the same.

AB: With ECX we aim to bring in state-of-the-art entertainment, at par with international standards to movie lovers. ECX has been first introduced in PVR Kurla and this is the second one. ECX pays special emphasis to the design, colours and lighting in a cinema. This revamped cinema has a mature and sophisticated appearance, enhanced by PVR’s corporate colours of black and gold. The cinema exudes style and modernity. We have used exquisite Noche travertine stone on the floors and the warm walnut wooden panels on the walls. The ceiling has an interesting inclined cove design dressed in a high gloss wooden finish; the entrances to the auditoriums are in a striking brown potro stone finish, with golden streaks that infuse vigour in the design.

AG: What else is new in terms of designing, hospitality and adding flavor to the whole experience?

AB: We have used timeless colours like beiges and browns, as I expect footfalls happening here. As compared to our other cinema theatres technology wise, it would be the same but looks and interiors will be different. There is also a wide array of food and beverages on offer. We have hired are own in-house team which will take care of food and hospitality. The food counters, clad in beige stone, have a warm and inviting look and the celebrity lounge exudes glamour and luxury. We have installed special silver screens with 2K digital projections and 7.1 Dolby surround sound. The screens are 3D enabled with JBL- four way speakers.

AG: What is the progress on IMAX in Mumbai? Is there anything new on offer?

AB: IMAX is really doing well and we are happy with the growth. We will announce something exciting soon.

AG: In terms of growth how was the last financial year 2012-13? Are you satisfied with the performance?

AB: Well certainly it was a good year. For 4QFY2013, PVR's consolidated top-line grew by 107 % y-o-y to Rs 242 crores (Cinemax's financials have been consolidated in Q4FY2013). Our standalone top-line growth was largely in-line with our estimates growing 28% y-o-y to Rs 145 crores on back of good performance in movie exhibition business, with many successful releases during the quarter. The company's consolidated EBITDA margin expanded by 227 basis points y-o-y to 5.8%. On the bottom-line front, net profit stood at Rs 11 crores (vs Rs 2 crores in 4QFY2013) on account of tax write back of Rs 29 crores.

AG: What are your business plans for the multiplex business? What are the targets?

AB: Multiplexes are one of our core properties and we are on the go to strengthen the same. Things that I look out for is overall revenue that is ticket pricing and footfalls.

AG: What are the new trends in this business?

AB: Customers today are becoming more and more discerning; it’s not easy to get them out to watch a movie. So, sound, good projection system, neat and clean ambience and hygiene is really important. A customer today is time & value conscious. Providing them a good experience at good price is what we trying to do.

AG: Off late we have heard that many multiplex chains have lowered their ticket prices? Was there a need for it?

AB: I feel that our business is like hotel business where we have to give various options to consumers. There are certain people who find weekend pricing high, for them we have weekday offer, flexible pricing. It’s a good idea as people are engaged throughout the week. And it balances our business concerns as well.

AG: Can you update us on the status & progress on other businesses of PVR?

AB: I am an exhibitor and we promote films. As for allied businesses, we have plans to launch  four more bowling centres across India during the current fiscal to take the total number of BluO outlets to nine. Currently PVR operates five BluO centres across India, including two each in Delhi and Bangalore. We have just launched our fifth destination under this brand at Pune, taking the tally of bowling lanes to 110. We want to be providers of entertainment solutions in malls. The proximity of BluO bowling centres with facilities like pool tables and karaoke rooms in the same complex, to PVR’s multiplexes helps the cinema business. During this fiscal, PVR Leisure (a subsidiary) and joint venture partner, Thailand Major Cineplex will invest to add another 78 lanes in four centres in Ludhiana, Chandigarh, Bangalore and Pune. As for our F&B business, we have opened the ‘Mistral’ restaurant in Delhi; a second similar outlet is on the cards in Bangalore. We will also add 17 new properties representing a total of 90 new screens including 15 under-construction screens of recently acquired company Cinemax  during the year.

AG: How do government regulations affect multiplexes businesses?

AB: There are no specific regulations that affect the business, yes there is entertainment tax which is high and could be rationalised.

AG: What are the challenges that you face & solutions for the same?

AB: Finding good real estate, right blends of things for consumers keeping, what they’ll like is a kind of challenge for us. But we navigate them and confront them.

AG: What is been the strength of PVR Cinema?

AB: That we never compromise on quality of what we want to provide.